Technical Analysis

Query Corner

D Yoganand | Updated on January 26, 2014 Published on January 26, 2014

26EscortsCL.eps

26adaniCL.eps

26fintechCL.eps

26optoCL.eps

26pnbCL.eps

26tatacoffCL.eps

I hold shares of Tata Coffee at ₹1,610. I need guidance on the short and long-term trend.

Yash Keshkamat

Tata Coffee (911.6): The stock encountered resistance at ₹1,675, just above your buy price in January 2013 and May 2013. Subsequently, it started to decline and in June 2013, it nose-dived breaking key support at ₹1,350 and ₹1,200. The price action since then is not promising as the stock has been moving sideways in the band between ₹900 and ₹1,185 with negative bias. Consider exiting the stock in rallies and re-enter later.

An emphatic fall below the significant long-term support at ₹900 will reinforce the ongoing medium-term downtrend. It can test next supports at ₹700 and then at ₹550. On the other hand, strong move above ₹1,200 can take the stock higher to ₹1,350. Key resistance above ₹1,350 is at ₹1,480 and ₹1,500 band.

I request your long-term opinion on PNB.

Nitin

Punjab National Bank (581.8): Punjab National Bank has been in a long-term downtrend from its all-time high of ₹1,395 marked in November 2010. Since then, PNB has been forming lower peaks and troughs. To alter this downtrend, the stock needs to emphatically move above the long-term trend deciding level of ₹900. The stock also faces a strong hurdle in the zone between ₹670 and ₹700. Long-term targets are ₹1,000 and ₹1,200. If the stock fails to hold above its long-term support at ₹400, it can decline to ₹300 in the same time period. Immediate resistance is at ₹ 640 and supports are pegged at ₹555 and ₹500.

Kindly advice regarding medium and long-term prospects of Opto Circuits purchased at ₹105. Can I average by purchasing more?

Rajiv

Opto Circuits India (30.9): The stock has been on a long-term downtrend from its 2010 peak of ₹252. Intermediate-term trend is also down. After reaching a low of ₹17.8 in June 2013, it began moving sideways in a wide range of ₹18 ad ₹33. An emphatic breakthrough of the upper boundary at ₹33 can take the stock northwards to ₹48. Traders with high-risk appetite can take long positions in that scenario with a stop-loss at ₹28. Key resistances above ₹48 are pegged at ₹65 and then at ₹100. Inability to move beyond either ₹48 or ₹65 can shackle the stock in the wide range between ₹20 and ₹65 in the medium-term. The stock needs to rally above ₹100 to alter its intermediate-term downtrend and push it higher to ₹120 and then to ₹150 in the long-term. Important supports now to watch are at ₹25 and ₹20.

Please let me know the short and long-term outlook for Financial Technologies purchased at ₹320.

Saktinath Mukherjee

Financial Technologies India (291): The stock has just begun to recover from its plunge in August 2013. Nevertheless, it met with a resistance at ₹340 recently and started declining. The stock is not completely out of the woods. Investors with low-risk appetite can exit the stock. Short-term trend is down. Immediate supports are at ₹271 and ₹250.

Investors with long-term horizon can consider holding the stock with a stop-loss at ₹ 200. A conclusive break-out of ₹420 can take the stock upwards to the ₹530-550 resistance zone. Next important resistance is at ₹700. But a strong fall below ₹200 can drag the stock down to ₹100. Significant supports below ₹100 are placed at ₹80 and ₹50.

I bought Escorts at ₹145 and Adani Enterprises at ₹274. Please advice whether to hold these stocks or sell.

G. Namasivayam

Escorts (119.7): After registering a 52-week high at ₹145 in late December 2013, the stock started to decline. It has been on a short-term downtrend since then. A key support at ₹111 is providing base for the stock. Hold as long as it trades above this base level. A decisive fall can strengthen the downtrend and pull the stock down to ₹100 and then to ₹90 in the short to medium-term.

An upward reversal from ₹111 can take the stock higher to ₹130 and then to ₹145. Strong rally above ₹145 is needed to take the stock higher to ₹170 in the medium-term.

Adani Enterprises (249.7): The key long-term support in the band between ₹120 and ₹130 arrested the stock’s downtrend in September 2013. Since then, the stock has been on a medium-term uptrend. However, significant long-term resistance around ₹290 arrested the stock last month. You can consider holding the stock while maintaining a stop-loss at ₹200. As long as the stock trades above ₹200, its medium-term uptrend stays positive. An upward breakthrough of ₹290 will pave the way for an up move to ₹340 and then to ₹420 in the long-term. On the downside, a strong decline below ₹200 will mar the stock’s uptrend and pull it down to ₹150 in the medium-term. Next support is at ₹120.





Published on January 26, 2014
This article is closed for comments.
Please Email the Editor